The Negotiating Committee is providing this update to the AMFA Membership at Southwest Airlines (SWA). This report is the only official authorized source of negotiating communications by the Committee.

Your Committee began the first day of the scheduled three-day session by delivering a comprehensive counterproposal to the proposal passed by the Company at the last session. Our counterproposal was a cover-to-cover package, which was designed to provide the Company with relief on the issues it has claimed it needs while also providing you with a compensation package that maintained our historical margin above the industry. Below you will see a comparison between the Company proposal that has not increased one penny from August 2016 and the economic package that we presented this week:

Our comprehensive proposal also included the following items designed to reward you for your dedicated service to this Company:

Full retroactive payment to compensate you for the time the Company has forced you to work without a pay raise;

An increased 401(k) package that would mimic what the Pilots obtained in their latest agreement;

Language to ensure that the cost split that you currently pay for health care premiums would remain the same;

Vacation bank that would allow you to bank two times your annual vacation accrual;

Language that would provide you with short-term disability compensation;

A mechanic to aircraft ratio that would capture the existing ratio, 3.3, and provide for future growth along with the fleet.

Our counterproposal also contained movement toward the Company on a number of the issues that it has indicated for years that it needed relief. We met the Company’s stated needs in Scope, ETOPS, international down-lines, and relief from mandatory temporary inspector backfill. We were optimistic given the substantial movement that the Company would respond accordingly, and we could then gain momentum toward a deal that you could vote on. Unfortunately, this did not happen.

The Company requested the remainder of Monday to evaluate our counterproposal. On Tuesday, the parties spent the day working on a joint intent document intended to clarify the language that we had proposed on Scope. The parties were making significant progress on Scope and that continued into Wednesday where it seemed that the two sides were on the brink of resolving Scope, which has been the most difficult issue during these negotiations. In the afternoon, however, the Company advised our Committee that it had to deliver a response to our entire proposal and that response would contain no movement from the existing Company economic position. Instead of continuing with the progress being made on Scope, the Company’s pronouncement that there would be no economic movement brought all momentum to a grinding halt.

The Company refused to counter on economics, including retroactive pay. The Company rejected our 401(k), insurance premium split protection, short term disability, and mechanic to aircraft ratio. The Company’s actions are not those of a bargaining partner interested in reaching a negotiated agreement. We are still reviewing all options surrounding the Company’s mediation-arbitration proposal, which would be separate and apart from NMB mediation, but we are scheduled to have another mediated session August 16-18, and are committed to reaching a negotiated agreement.